UK Chancellor of the Exchequer (equivalent to the US Treasury Secretary) Kwasi Kwarteng (Cons.) announced significant tax cuts along with £72 billion in new spending to forestall higher energy bills this winter. Unfortunately, this massive stimulus comes during some of the highest inflation the UK has seen in a generation, estimated to be nearly 10% annualized as of this week.
Consequence? This, as of just a few minutes ago:
Sterling hasn't gone below $1.10 since 1985, and it probably won't again during my lifetime.
The Economist has no confidence in the scheme:
[Prime Minister Liz] Truss’s attempt to emulate the Gipper’s success is doomed. To see why, consider the currency markets. Reaganomics was accompanied by a strengthening dollar. So were Donald Trump’s tax cuts in 2018, which also happened alongside monetary tightening.
In Britain, though, the pound has slumped by 16% against the dollar in 2022.
As a result, the BOE will get no help from currency markets as it offsets Ms Truss’s fiscal stimulus with tighter monetary policy. Instead more expensive imports are boosting inflation. That is a big headache for an economy that depends on trade as much as Britain’s does.
Ms Truss’s cheerleaders seem to have read only the first chapter of the history of Reaganomics. The programme’s early record was mixed. The tax cuts did not stop a deep recession, yet by March 1984 annual inflation had risen back to 4.8% and America’s ten-year bond yield was over 12%, reflecting fears of another upward spiral in prices. Inflation was anchored only after Congress had raised taxes. By 1987 America’s budget, excluding interest payments, was nearly balanced. By 1993 Congress had raised taxes by almost as much as it had cut them in 1981. If Britain’s government does not correct its course in the same way, the result will be more conflict between monetary and fiscal policies—and a risk that inflation becomes entrenched.
On the other hand, lower costs in the UK combined with the usual slowdown in tourism across the Atlantic in autumn have made this possible on a 21-day advance purchase:
If only I weren't moving or performing in an opera in the next eight weeks, I'd buy a ticket to London right now.
I'm movin' out. A lovely young couple have offered to buy Inner Drive World Headquarters v5.0, and the rest of the place along with it. I've already gotten through the attorney-review period for IDTWHQ v6.0, so this means I'm now more likely than not to move house next month.
Which means I have even less time to read stuff like this:
Finally, American Airlines plans to get rid of its First Class offerings, replacing them with high-tech Business Class and more premium coach seats. I'd better use my miles soon.
I've had two parallel tasks today, one of them involving feeding 72 people on Saturday. The other one involved finishing a major feature for work. Both seem successful right now but need testing with real users.
Meanwhile, outside my little world:
- The XPOTUS seems to have backed himself into a corner by lying about "declassifying" things psychically, after the Special Master that he asked for called bullshit. Greg Sargent has thoughts.
- Pro Publica reported on Colorado's halfway-house system that sends more people back to prison than it rehabilitates.
- The Navy has begun its court-martial of Seaman Recruit Ryan Mays, accused of lighting the fire that destroyed the USS Bonhomme Richard in 2020.
Finally, Ian Bogost (and I) laments the disappearance of the manual transmission.
It happens every September in the mid-latitudes: one day you've got over 13 hours of daylight and sunsets around 7:30, and two weeks later you wake up in twilight and the sun sets before dinnertime. In fact, Chicago loses 50 minutes of evening daylight and an hour-twenty overall from the 1st to the 30th. We get it all back in March, though. Can't wait.
Speaking of waiting:
Finally, Fareed Zakaria visited Kyiv, Ukraine, to learn the secret of the country's success against Russia.
The President announced this morning that negotiators have reached a tentative deal between the railroads and their engineers and conductors, averting tonight's planned strike:
Freight rail companies and unions representing tens of thousands of workers reached a tentative agreement to avoid what would have been an economically damaging strike, after all-night talks brokered by Labor Secretary Martin J. Walsh, President Biden said early Thursday morning.
The agreement now heads to union members for a ratification vote, which is a standard procedure in labor talks. While the vote is tallied, workers have agreed not to strike.
The talks brokered by Mr. Walsh began Wednesday morning and lasted 20 hours. Mr. Biden called in around 9 p.m. Wednesday, a person familiar with the talks said, and he hailed the deal on Thursday in a long statement.
“Most importantly, for the first time ever, the agreement provides our members with the ability to take time away from work to attend routine and preventative medical, as well as exemptions from attendance policies for hospitalizations and surgical procedures,” the presidents of the Brotherhood of Locomotive Engineers and Trainmen and the Transportation Division of the International Association of Sheet Metal, Air, Rail and Transportation Workers said in a news release.
Excellent news for the unions! And for us travelers, and for us consumers. Whew.
Chicago's heavy-rail commuter district, Metra, started cancelling train service that would extend past the midnight-Friday start time of the planned nationwide rail strike. Well, taking the El to work instead of Metra adds about 9 minutes to my commute, so I'll have to deal with that on Friday, I suppose. Except that commuter rail shutdowns don't even start to illustrate how bad this strike could turn out for the US economy:
[A strike] would cause immediate problems for manufacturers, says Lee Sanders with the American Bakers Association. This is nationwide. And a broad range of manufacturers who get parts, packaging and raw material delivered by rail would be effected.
"If we don't get the ingredients that we need to our plants, we won't be able to make the products that we need to get our wholesome products to the consumers," Sanders says.
So, empty shelves are a possibility. Farmers are worried too about shipping grain. Dangerous chemicals have already stopped moving. Especially valuable goods are next, and passengers are getting stranded too.
Don't forget about coal, either. About 22% of US electricity comes from coal-fired plants, including 30% of Illinois' power. (As it turns out, Illinois has a higher proportion of nuclear power—about 54% of output—than any other state, which gives us a bit more reliability.)
I have a lot of sympathy for the engineers and conductors, whose schedules seem even less predictable than even fast-food workers. I hope the railroads agree to better scheduling and time-off provisions before Friday, or we're going to have a major economic disruption while we already have high inflation. Not a good combination.
My commute to work Friday might get a little longer, as Metra has announced that 9 out of its 11 lines (including mine) would likely not operate if railroad engineers and conductors go on strike Friday. Amtrak has already started cancelling trains so they won't get stranded mid-route should the strike happen.
In other news:
- Cook County tax bills won't come out until late autumn, according to the County President, meaning no one knows how much cash they have to escrow when they sell real estate.
- The Post has an interactive map showing everywhere in the US that hit a record high temperature this summer.
- US Rep. Marjorie Taylor "Still Smarter than Lauren Boebert" Greene (R-GA) has come up with a climate-change theory so dumb it actually seems smart.
- US Sen. Lindsay Graham (R-SC), another intellectual giant of the 117th Congress, proposed a Federal abortion ban, demonstrating a keen command of how most people in the United States view the issue.
- Robert Wright explores "why we're so clueless about Putin."
- Block Club Chicago explains why my neighborhood and a few others experienced massive geysers coming out of storm drains during Sunday's flooding rains.
Finally, right-wing lawyer Kenneth Starr died at age 76. No reaction yet from Monica Lewinsky.
Writing as a guest of James Fallows, former defense official Jan Lodal outlines how subparagraph (d) of the Espionage Act should be a slam-dunk in prosecuting the XPOTUS:
This paragraph makes a straightforward action a crime: namely, failing to return classified documents if properly directed to give them back. No proof of the level of classification, or the intentions of the document holder, or the content of the documents, is required. Just a simple question, did he or she give them back or not.
This section of the Espionage Act does not require that prosecutors access or cite individual documents to prove the crime. It requires only that there were any classified documents in the boxes that Trump did not return. On that there is no doubt. It was settled by the release of the Department of Justice (DoJ) Affidavit authorizing the Mar-A-Lago document seizure.
Trump’s violation of this Subparagraph (d) of the Espionage Act could not be clearer. Unlike all other crimes being considered for prosecution, Subsection (d) requires no probing of intent or consequence. It defines as criminal a clear process violation—“failing to return” classified documents when properly asked to do so.
Given our politics and our jury system, keeping the legal actions against Trump simple is better for now. Prosecution for other offenses after getting an initial conviction will then be more likely to succeed. DOJ should take this path to reduce the risk that obfuscation and assertions of inapplicable rights and privileges by a former president could override the fragile rule of law in our constitutional democracy.
Having watched the DOJ build its case, and knowing that Attorney General Merrick Garland takes things slowly and deliberately, I expect to see this charge sooner rather than later. But I also suspect that the DOJ wants to build the most comprehensive case it can. We'll see.
Just a few before I take a brick to my laptop for taking a damned half-hour to reformat a JSON file:
Oh, good. My laptop has finished parsing the file. (In fairness it's 400,000 lines of JSON, but still, that's only 22 megabytes uncompressed.) I will now continue with my coding.
The Washington Post Fact Checker digs deep into the allegations of mishandling classified material against former Secretary of State Hillary Clinton and finds, nah, she good:
The Justice Department investigation of classified documents found at former president Donald Trump’s Mar-a-Lago Club has brought inevitable comparisons to the controversy over Hillary Clinton’s private email server that she used while secretary of state. The FBI investigation into her emails arguably tipped the close 2016 presidential election to Trump.
During the contest between Trump and Clinton, we wrote 16 fact checks on the email issue, frequently awarding Pinocchios to Clinton for legalistic parsing. But in light of the Trump investigation, Clinton is trying to draw a distinction between Trump’s current travails and the probe that targeted her.
As shown in an FBI photo of some of the documents seized from Trump, many have clear markings indicating they contained highly sensitive classified information. Clinton, in her tweet, suggests none of her emails were marked classified. That’s technically correct. Whether those emails contained classified information was a major focus of the investigation, but a review of the recent investigations, including new information obtained by the Fact Checker, shows Clinton has good reason for making a distinction with Trump.
In other words, [two] State Department probes under Trump knocked Clinton for maintaining a private server for State Department communications — but did not hold her responsible for mishandling classified information.
Of course, all the Benghazi and email server hearings that Clinton had to endure had nothing at all to do with their subject matters, because the current Republican Party doesn't care at all about substance. Everything they do is performance, for political points. And they've been at that so long, in fact, that many Republicans can't fathom that the probe of the XPOTUS's mishandling of classified material has nothing to do with political points and everything to do with the damage that he did to national security.